As you may have heard, Oregon is now the first to have passed a state-wide rent control bill that is now law.
Earlier in the month I attended a class on the "State of Rentals in Portland". Among the hot topics of conversation was the proposed state-wide Rent Control bill, SB 608. Since that time, the bill has passed the Senate and has become law. According to the article from NPR, "Under this new law, landlords across the state could raise rent no more than 7 percent per year, plus the annual change in the consumer price index. The bill carves out an exemption for rental properties that are less than 15 years old. The measure would also prevent a landlord’s ability to evict tenants without a reason after they have lived in the building for a year." The statewide rent control bill has an “emergency clause” and thus will become effective immediately.
Governor Kate Brown who signed the bill into law was quoted as saying "“This bill is a critical tool for stabilizing the rental market throughout the state of Oregon,” Brown said. "It will provide immediate relief to renters struggling to keep up with the rising rents in a tight rental market."
But Housing Economists who spoke with Inman, a real estate industry news source, think the legislation, as written, will have either little or adverse impact on tenants and affordability. Indeed, the National Association of Realtors and other real estate industry experts were vehemently opposed to the bill. Doug Bibby, president of the National Multifamily Housing Council, told USA Today. “While the intent of rent control laws is to assist lower-income populations, history has shown that rent control exacerbates shortages, makes it harder for apartment owners to make upgrades, and disproportionately benefits higher-income households.”
From my vantage point as a Realtor, there has been immediate effects on smaller mom and pop landlords. They have decided the one-two punch of the Oregon-wide rent control bill, combined with the Portland city-wide mandatory Renter Relocation Assistance ordinance, has made owning rental property too fraught with landmines to continue, and are selling and getting out of the landlord business. According to Portland property management sources, they believe that there is not a shortage of housing in Portland, but a shortage of affordable housing, and that wage growth has not kept up with the pace of housing costs.
I'll keep studying the results of the new law and report to you what I am seeing and learning as the year continues!